The studying of 105 was 3 factors decrease than a month earlier
3 July 2024
3 minute learn
Farmer sentiment drifted downward in June because the Purdue College/CME Group Ag Economic system Barometer studying of 105 was 3 factors decrease than a month earlier, in accordance with a press launch from Purdue College. The general decline in sentiment was as a consequence of a five-point drop within the Index of Future Expectations, which fell to 112, whereas the June Present Circumstances Index elevated to 90, 1 level increased than the Might index. Excessive enter prices, the danger of decrease costs for his or her merchandise, and rising rates of interest proceed to weigh on farmer sentiment. This month’s Ag Economic system Barometer survey was carried out from June 17-21.
“The impression of rising rates of interest on their farm operations has change into a much bigger concern for producers in latest months,” stated James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Business Agriculture. “Rate of interest threat and excessive breakeven ranges mixed with considerations that crop and livestock costs might weaken are holding again producer sentiment and making producers cautious about making giant investments.”
This month’s Farm Capital Funding Index declined by 3 factors to a studying of 32, only one level above its historic low. Extra producers indicated this month that it’s not a positive time for giant investments in comparison with Might, whereas the proportion of producers who seen it as a superb time remained the identical.
The Brief-Time period Farmland Worth Expectations Index remained regular at 115 for June. Nevertheless, there was a notable shift in producers’ longer-term outlook on farmland values, with the Lengthy-Time period Farmland Values Index dropping to 152, down 7 factors from Might. Fewer producers anticipate that farmland values will improve over the subsequent 5 years, coinciding with an increase in these anticipating values holding regular. Amongst these anticipating a long-term improve in farmland values, 57% attributed their confidence to nonfarm investor demand, whereas 16% cited inflation as a driving issue. June marked the third consecutive month to incorporate “Power Manufacturing” as a possible driver of farmland values, with 10% of optimistic respondents pointing to vitality manufacturing as a key driver of farmland values.
This month’s survey additionally explored respondents’ curiosity in carbon seize and storage initiatives launched by ethanol crops. Eight % of respondents reported being approached about such initiatives, with the bulk (93%) noting they obtained fee provides for lower than $25 per acre and solely 8% receiving provides exceeding $50 per acre. Moreover, 16% of respondents reported discussions happening inside the final six months about leasing farmland for photo voltaic vitality manufacturing, a slight decline from April and Might survey responses. Nevertheless, lease charges continued an upward pattern, with 69% of respondents being provided long-term charges of $1,000 per acre or increased, in comparison with 27% in June 2021. Notably, 27% of respondents obtained provides of $1,500 per acre or extra, with 58% of leases together with an annual escalator clause, usually between 2% and three% per yr.
